721 F.3d 217
4th Cir.2013Background
- The Fund obtained a $16,140.64 default judgment in federal court against Tao Construction for ERISA contribution shortfalls.
- While enforcing the judgment, the Fund discovered Tao’s CEO contracted with the Maryland Department of Health and Mental Hygiene (the Department) under the trade name Pharoah Building and Construction.
- The district court concluded Pharoah was Tao’s alter ego and issued a Maryland writ of garnishment against the Department for $9,963.52 payable to Tao d/b/a Pharoah.
- The Department moved to quash the writ, asserting Eleventh Amendment sovereign immunity and Maryland public-policy defenses; the district court denied the motion, reasoning the Department was a mere custodian, not a real party in interest.
- The Fourth Circuit accepted interlocutory review of the denial of immunity and reversed, holding that a federal garnishment seeking state funds is a “suit” barred by sovereign immunity and directing the writ be quashed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether a federal post-judgment writ of garnishment against a state is a "suit" barred by the Eleventh Amendment | Garnishment targets specific funds the state holds as custodian for a private contractor; not a suit against the State | Garnishment forces the State to appear or risk default and seeks recovery from the State treasury, so it is a suit barred by sovereign immunity | Held: Garnishment is a "suit" procedurally and substantively; Eleventh Amendment bars it; writ must be quashed |
| Whether the State’s admission of indebtedness or custodian status removes Eleventh Amendment protection | State’s admitted indebtedness to the contractor means immunity shouldn't block collection | Immunity is jurisdictional and protects the State from being haled into federal court regardless of admitted liability | Held: Admission of indebtedness does not eliminate sovereign immunity; jurisdictional bar remains |
| Whether the proceeding is properly characterized as in rem to avoid immunity | Fund: garnishment is quasi in rem and proceeds against specific funds, not the State generally | Court: garnishment has in personam elements and effectively targets the State treasury, circumventing immunity | Held: Characterization as in rem/quasi in rem is insufficient; proceeding functions as a suit against the State |
| Whether state public-policy grounds independently require quashing the writ (appellate jurisdiction over this question) | Fund argued state policy didn't preclude garnishment | Department argued Maryland policy forbids garnishing state funds | Held: Appellate court declined to decide state-policy issue because district court's final order did not resolve it; Eleventh Amendment ruling dispositive |
Key Cases Cited
- Alden v. Maine, 527 U.S. 706 (state sovereign immunity extends beyond Eleventh Amendment text)
- Seminole Tribe of Fla. v. Florida, 517 U.S. 44 (sovereign immunity protects states from suits in federal court)
- Federal Maritime Commission v. South Carolina State Ports Authority, 535 U.S. 743 (state immunity extends beyond literal Eleventh Amendment)
- Cohens v. Virginia, 19 U.S. 264 (definition of what constitutes a "suit")
- In re NVR, LP, 189 F.3d 442 (4th Cir.) (procedural/substantive test for when a proceeding is a "suit")
- Department of the Army v. Blue Fox, Inc., 525 U.S. 255 (sovereign immunity bars garnishment of Treasury funds)
- Franchise Tax Board of Cal. v. U.S. Postal Service, 467 U.S. 512 (creditors cannot collect from federal salary via garnishment absent waiver)
- Federal Housing Administration v. Burr, 309 U.S. 242 ("sue and be sued" can encompass garnishment; garnishment is part of civil process)
- The Schooner Exchange v. McFaddon, 11 U.S. 116 (sovereign immunity from attachment of sovereign property)